Micron’s $9.3 Billion Hiroshima Bet Pits a Record Backlog Against a Short Seller’s Warning
Published on 07/05/2026 at 19:07 | Redaktion boerse-global.de
The ground has broken in western Japan, where Micron Technology is pouring $9.3 billion into expanding its Hiroshima fabrication plant. The prize: more capacity for high-bandwidth memory (HBM) chips, the specialised components that feed artificial-intelligence processors. First production is slated for mid-2028. Yet even as the bulldozers roll, a legendary bear is betting that the architect of this expansion is building a trap.
Michael Burry, the investor famous for calling the housing crash, has gone public with a short position on Micron, dismissing the company’s long-term returns as “frankly terrible”. He points to a median return on invested capital of just four percent and a return on equity of seven percent, calling the business a “capital destroyer” in every third quarter, with free cash flow negative in nearly half of all periods. His core thesis: the memory industry’s cyclical history, combined with a synchronised capacity build-out by rivals SK Hynix and Samsung, will eventually overwhelm demand.
The bulls, for their part, respond with a suite of counterarguments grounded in the present moment. In the quarter ended May, Micron reported revenue of $41.5 billion — a 345.7 percent surge from the year-ago period. Gross margin ballooned from 37.7 percent to 84.6 percent. Operating margins in the data-centre segment topped 78 percent. The financial foundation for expansion, in other words, looks solid.
Management has also been locking in future revenue. Sixteen strategic customer agreements have been signed, fourteen of which guarantee a cumulative minimum of $100 billion in sales, most running through 2030. The executive team expects the DRAM and NAND markets to remain structurally tight “well into 2027”, supporting current pricing. Last Friday alone, the stock jumped nearly seven percent, closing at €912. That leaves the shares up 239 percent year to date — though still roughly 17 percent below the June record high of around €1,103.
Should investors sell immediately? Or is it worth buying Micron?
The distance from the 200-day moving average of about €391 illustrates just how much optimism has been priced in. The relative strength index stands at 52, a neutral reading that offers little directional guidance. Some analysts see further room to run: the consensus price target is $1,486, and Micron has guided for roughly $50 billion in revenue for the coming quarter.
Yet the capacity-risk narrative is not limited to Burry. The company is simultaneously expanding sites in Idaho, New York and Singapore, and those factories are scheduled to begin output before Hiroshima. If the market absorbs that first wave without a price collapse, the bullish case strengthens. If not, the shares could be repricing the glut risk for 2028 well before the Japanese plant comes online.
History offers a warning. Memory-chip makers have repeatedly built new fabs at the peak of a cycle, only to see prices crash when the output arrives. The sheer scale of the current wave — Micron, SK Hynix and Samsung all investing aggressively — amplifies that danger. There is also a technological risk: a smooth transition to the next manufacturing node, HBM4E, is by no means guaranteed.
Technical action suggests some profit-taking has already occurred. The stock has cooled from its June peak, and over the past seven days it has fallen 8.4 percent. Nevertheless, it still trades 19.6 percent above its 50-day moving average of €762, indicating that the short-term sell-off has not broken the long-term uptrend.
Micron at a turning point? This analysis reveals what investors need to know now.
The broader semiconductor landscape provides additional context. While Micron faces bearish headwinds, other players are riding tailwinds of their own. ASML, the lithography-equipment monopoly, has seen a raft of analyst upgrades and sits at a consensus “Strong Buy”. Broadcom, meanwhile, unveiled a custom AI chip dubbed “Jalapeño” in partnership with OpenAI, claiming a 50 percent cost saving over standard GPUs. Nvidia is experimenting with a revenue-sharing financing model for smaller cloud providers. But for Micron, the immediate focus is on the data centre spending pipeline and the trajectory of HBM allocations.
The next major test comes with the company’s quarterly report, where the $50 billion revenue guidance will be scrutinised alongside fresh data on HBM pricing and hyperscaler investment plans. If demand holds, the Hiroshima project looks like a well-timed capacity addition for a structurally larger market. If data-centre spending falters, the combined production wave from three big memory makers could compress margins faster than anyone currently expects. The tension between a record backlog and a storied bear’s warning may define Micron’s summer.
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